What is a betting exchange?
This is a neutral meeting place where a user can bet against another user, and not against a traditional bookmaker.
BetFair is the biggest betting exchange in the world. All bets on BetFair have been placed there by users who either want to have a bet in the normal way (back), or offer odds to other users (lay).
Bets are matched between people with opposing views.
Back or Lay
When you "back" a selection (be it an individual, a team, horse, dog or other), you are betting that it will win. This is just like betting with conventional bookies.
When you "lay" it, you are betting against it winning. For example, if you're betting in a market on which team is going to win the Premiership and you lay Man Utd; you offer odds to other punters who wish to back Man Utd. If Man Utd doesn't win, then you pick up the backer's stake. If Man Utd wins, then you pay out. This is what bookmakers traditionally do.
You never know who you are betting against, your privacy and the confidentiality of your bets is maintained by Betfair's secure site.
Choose Odds
With BetFair there is always a choice of what odds to accept. If you want better odds than are currently available, you can place an order for a better price, but be realistic because there has to be somebody prepared to lay the bet at those odds, and vice versa.
Take a look at the odds before a game and you will see them change as visitors back and lay their bets. The odds often improve nearer to the off, as there are more people in the market.
Why use a betting exchange?
- You can back or lay a bet.
- You can choose the odds you want to play at; odds on BetFair are on average up to 20% better than those offered by traditional bookmakers.
- You can bet while the game is in play; meaning you can trade in and out of positions as the game unfolds.
An example:
Chelsea vs. Arsenal 1.) Back Arsenal before the kick off with £100 at 3.0 (liability = £100, potential payout on Arsenal win = £300) 2.) If Arsenal score during the first half, their odds to win the game will reduce, to say 2.0. 3.) Lay Arsenal with £150 at 2.0 (liability = £150, potential payout on Arsenal not to win = £300) 4.) This means, regardless of the result, a £50 win guaranteed (combined liability = £250, guaranteed payout = £50).
